Mortgage Protection and Previous Health Issues

sabinalee

I wonder if anyone know the answers to below. Im blind with this things.

Me and my husband took life insurance 3 months ago.
Insurance company punished me for having too many moles on my body ( sorry, forgot proffesional name of this syndrome ), for having anemia when I was younger and at the end I could not have health cover and have to pay 50% extra to my life insurance.
My husband life and health stays standard.

When taking a mortgage and mortgage protection, do BANK will make any problems that my health insurance is not covered?

and

if the mortgage will be 140.000 do both of us have to owe life insurance for exact amount of 140.000.

Thank you.

mickmac76

sabinalee wrote: »

I wonder if anyone know the answers to below. Im blind with this things.

Me and my husband took life insurance 3 months ago.
Insurance company punished me for having too many moles on my body ( sorry, forgot proffesional name of this syndrome ), for having anemia when I was younger and at the end I could not have health cover and have to pay 50% extra to my life insurance.
My husband life and health stays standard.

When taking a mortgage and mortgage protection, do BANK will make any problems that my health insurance is not covered?

and

if the mortgage will be 140.000 do both of us have to owe life insurance for exact amount of 140.000.

Thank you.

Hi OP
The banks insist that your coverage pays the mortgage if you die before the term of the mortgage is up and this is what your policy does. Some policies pay off the full loan amount if one person dies and other policies pay half the loan amount if a person dies. The first type of policy is more expensive. I can't tell which type of policy you have but it should be indicated in your policy documents or give the insurance company a call and ask them.

Your husbands policy will pay the mortgage each month if he's ill but I'm guessing it will only pay half the mortgage and you will be responsible for the other half. Note that these policies usually only pay out for specific serious illness. Your documentation should list when it will pay out.

Finally although the bank can insist on you having insurance you can pick which company you take it out with. Banks often push their own more expensive insurance products at people. You can change your insurance providers but you must inform the bank if you do this.

Henry Ford III

mickmac76 wrote: »

...Some policies pay off the full loan amount if one person dies and other policies pay half the loan amount if a person dies. .....

I've no idea what you mean here. All life policies will pay out the full sum assured on death.

Henry Ford III

sabinalee wrote: »

I wonder if anyone know the answers to below. Im blind with this things.

Me and my husband took life insurance 3 months ago.
Insurance company punished me for having too many moles on my body ( sorry, forgot proffesional name of this syndrome ), for having anemia when I was younger and at the end I could not have health cover and have to pay 50% extra to my life insurance.
My husband life and health stays standard.

When taking a mortgage and mortgage protection, do BANK will make any problems that my health insurance is not covered?

and

if the mortgage will be 140.000 do both of us have to owe life insurance for exact amount of 140.000.

Thank you.

Looks like you took out a life assurance policy with serious illness cover include OP.

You were declined for the serious illness element, and rated extra for life assurance.

You'll need to give your lender a life policy to cover the mortgage sum assured for both lives for the full amount of the loan.

The cheapest way to do that (although not necessarily the best value) is a simple mortgage protection policy. This is joint life policy with a decreasing sum assured designed to mirror the reducing debt.

You are free to purchase this policy anywhere and don't have to buy it from the bank who may not offer the most competitive terms or rates.

You will have to disclose your previous rating, and it may affect the cost of the new policy.

Your being declined for serious illness cover is of no consequence to your lender.

Manion

You can take out a life assurance policy which pays out X in the event that one of you dies. This means that the policy is paid out on the first death and ends. Or you can take out a policy that continues after death of the first person. So if both of you die your estate would effectively get 2X.

You can also take out mortgage protection which just pays off the mortgage at time of death, whatever that amount happens to be.

If your existing life assurance covers both people, pays out enough to cover the mortgage in total and has a term equal to or greater than the mortgage term, you are fine to use that life assurance policy you just need to sign a legal document staying the bank gets their money first in the event of a death.

I'm not too sure what the story is with not being able to get health insurance, in Ireland we have collective risk, so you should be able to get health cover no problem, subject to waiting periods for existing conditions. That said, the banks don't care about health insurance.

sabinalee

Thank YOU all!

We only sale agreed on the house of 140.000 mortgage, so I prefer to know all before, without being surprised.

We have a dual policies for 10 years term, with protection continuation option.The sum of life cover for both of us is not huge and it's 160.000. I'm 40 and my husband is 50 this year.

If we take a mortgage for 17 years, do we have to extend our life policy from 10 to 17 years then?

About my serious illness being declined,...my broker sent me two declaration forms from different companies today - Royal London, and New Ireland. He will try to get better terms.
I'm not loosing anything anyway.

Manion

I can only speak for my bank, KBC, but their underwriters required the term of the life assurance to be equal or greater than the mortgage term. Having a continuance option didn't enter into it. So I'd imagine the answer is yes you will need to extend if that is possible.

Henry Ford III

sabinalee wrote: »

Thank YOU all!

We only sale agreed on the house of 140.000 mortgage, so I prefer to know all before, without being surprised.

We have a dual policies for 10 years term, with protection continuation option.The sum of life cover for both of us is not huge and it's 160.000. I'm 40 and my husband is 50 this year.

If we take a mortgage for 17 years, do we have to extend our life policy from 10 to 17 years then?

About my serious illness being declined,...my broker sent me two declaration forms from different companies today - Royal London, and New Ireland. He will try to get better terms.
I'm not loosing anything anyway.

You'll have to effect a new policy because the one you have isn't suitable. 10 year term is too short.

Henry Ford III

Manion wrote: »

I can only speak for my bank, KBC, but their underwriters required the term of the life assurance to be equal or greater than the mortgage term. Having a continuance option didn't enter into it. So I'd imagine the answer is yes you will need to extend if that is possible.

Continuation option can only be exercised at the end of the original term. It won't work in this case.

A new policy is needed.